Loss of earning capacity remains compensable despite voluntary retirement due to diminished marketability of labour.

On February 24, 2010, the claimant (Respondent No. 1) sustained grievous injuries while deboarding a bus (the offending vehicle) when the driver (Respondent No. 2) suddenly moved the vehicle in a rash and negligent manner.

A Medical Legal Certificate (MLC) was prepared at Bara Hindu Rao Hospital, and FIR No. 229 was subsequently registered under Sections 279/337 of the IPC.

The claimant suffered a 40% permanent disability in her left lower limb, involving fractures of the fibula and metatarsals.

Although she was an employee of the Municipal Corporation of Delhi (MCD), she opted for voluntary retirement due to her injuries.

The Motor Accident Claims Tribunal (MACT) awarded compensation of Rs. 6,16,350 with 9% interest.

The Insurance Company appealed, contesting the finding of negligence due to a delay in FIR registration and challenging the lump-sum award of Rs. 2,00,000 for loss of future income given the claimant’s voluntary retirement.

1. Whether the delay in registering the FIR disproves the allegation of negligence against the driver of the offending vehicle.

2. Whether a claimant who takes voluntary retirement is entitled to compensation for loss of future income based on the diminished "marketability of labour".

The Court applied the principle that motor accident claims are established on the touchstone of "preponderance of probabilities" and not "proof beyond reasonable doubt," as held in Bimla Devi v. Himachal RTC (2009) and Geeta Dubey v. United India Insurance Co. Ltd. (2024).

Regarding loss of earning capacity, the Court relied on the "marketability of labour" doctrine derived from the House of Lords in Ball v. William Hunts and Sons Ltd. (1912), which establishes that incapacity exists when a physical defect makes a person's work "unsaleable in any market reasonably accessible to him".

This was further supported by Govind Singh Mauni v. Tej Bhan & Ors. (2026) and the mandate for "just compensation" under Section 168 of the Motor Vehicles Act as interpreted in Sarla Verma v. DTC (2009) and Pranay Sethi (2017).

The Court rejected the Appellant’s challenge to the finding of negligence, stating that a delay in lodging an FIR does not automatically negate a claim if the version is otherwise probable.

Applying Bimla Devi, the Court found that the consistent testimonies of the claimant (PW1) and an eyewitness (PW3), corroborated by the contemporaneous MLC, established negligence on a preponderance of probabilities.

Regarding the loss of future income, the Court dismissed the Appellant's argument that voluntary retirement precluded such a claim.

The Court reasoned that a 40% permanent disability to the lower limb constitutes an economic vulnerability and a "serious handicap" in the open labour market.

Even if immediate wages were not lost at the time of the accident, the claimant’s future employability and "saleability" as a recruit were permanently diminished, justifying the lump-sum award.

It held that the standard of proof in motor accidents was satisfied and that permanent disability warrants compensation for loss of future earning capacity even in cases of voluntary retirement due to the impact on the claimant's marketability of labour.

The Registrar General was directed to release the remaining 30% of the awarded amount with accrued interest to the claimant, and the statutory deposit was ordered to be refunded to the Appellant.